B.C. deficit jumps after HST defeat

The defeat of the harmonized sales tax has nearly tripled B.C.'s deficit forecast for the current fiscal year, doubled it for next year, and left a $458 million gap for 2013 when the B.C. Liberal government has committed to balance the budget and call an election.

Finance Minister Kevin Falcon says the government will find a way to bring B.C.'s budget out of the red by 2013.

Finance Minister Kevin Falcon says the government will find a way to bring B.C.'s budget out of the red by 2013.

VICTORIA – The defeat of the harmonized sales tax has nearly tripled B.C.’s deficit forecast for the current fiscal year, doubled it for next year, and left a $458 million gap for 2013 when the B.C. Liberal government has committed to balance the budget and call an election.

Finance Minister Kevin Falcon revealed the latest projections in the province’s first quarter economic update Thursday. The ministry calculates that scrapping the HST will cost the provincial treasury $2.2 billion over three years, including $700 million less revenue once the old provincial sales tax is reinstated. Further revenue reductions are expected in later years before economic growth makes up the sales tax revenue.

Falcon said he will be traveling the province this fall for the annual budget consultation, but he has already heard that the public has little appetite for new tax or fee increases to make up for undoing the HST.

He said the cabinet has not yet decided if the “net zero” mandate for public sector union negotiations will be extended after it expires this December. But he gave a strong hint to the B.C. Teachers’ Federation and the B.C. Government and Service Employees’ Union, the two largest groups that have not yet agreed to contracts under those conditions.

“I’m not looking at any kind of a rollback in wages,” Falcon said. “I think all we’re saying is that the public sector needs to recognize that in the world we’re in now, this isn’t a good time to be asking for significant increases.”

NDP finance critic Bruce Ralston refused to comment on whether teachers or other government workers should get raises, after his party helped in the two-year effort to repeal the HST. He said if lower-paid public employees have to sacrifice for Falcon’s cost-cutting exercise, executives in government and Crown corporations should also share the pain.

The finance ministry now expects the deficit for 2011-12 to be $2.3 billion, up from $925 million in the spring budget. That is mainly due to borrowing to repay the federal government’s $1.6 billion HST transition fund.

The deficit for 2012-13 is doubled to $805 million, and another $458 million must be made up through cost reductions or extra revenue for the government to balance the books for 2013-14.

The HST reversal means the province’s total debt is expected to reach $62.3 billion in the next three years.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The process of integrating Union Bay services into the regional district can now begin. Record file photo
Union Bay transfer to region targeted for July 2021

Three services will be rolled into Comox Valley Regional District

Mike Aldersey, the Port McNeill base manager for West Coast Helicopters has been awarded the prestigious Agar/Stringer Award by the Helicopter Association of Canada. (Submitted photo)
Vancouver Island pilot receives coveted helicopter industry award

Port McNeill based Mike Aldersey is the recipient of the 2o2o Agar/Stringer Award given out to select few Canadians

12-year-old Ella Smiley captured some video of orcas on a sea lion hunt on Nov. 28 at Kitty Coleman Park, just north of Courtenay. Photo by Ella Smiley
VIDEO: Orcas hunt sea lion near Kitty Coleman Park

Twelve-year-old Ella Smiley, of Comox Valley Wildlife Sightings, caught up with a… Continue reading

The School District 71 DPAC hosted an online forum for candidates hoping to fill a vacant board of education position. Screenshot, SD71 DPAC Facebook page
Six make their pitch to fill empty school board seat in Comox Valley

District’s parents advisory council hosted the online forum for Area C candidates

Many of the static aircraft displays are decorated in thousands of lights for almost the entire month of December at the airpark on Military Row in Comox. Photo by Erin Haluschak
VIDEO: Christmas lights on display at 19 Wing airpark

Per COVID-19 rules, viewing of the display is strongly encouraged by vehicle and not exiting the car

A tongue-in-cheek message about wearing a face mask to curb the spread of COVID-19 on a sign outside a church near Royal Columbia Hospital, in New Westminster, B.C., on Sunday, Nov. 29, 2020. THE CANADIAN PRESS/Darryl Dyck
B.C.’s COVID-19 infection count climbs back up to 656

20 more people in hospital, active cases still rising

Letter to the editor.
LETTER – Horgan’s election promise of COVID relief cash is money foolishly spent

Dear editor, Would you dip into your child’s registered education fund to… Continue reading

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

(Needpix.com)
Fraudsters projected to use pet scams to gouge over $3M from customers: BBB

The pandemic heavily contributed to the number of puppy scams

A teacher places the finishing touches on the welcome sign at Hunter’s Glen Junior Public School which is part of the Toronto District School Board (TDSB) during the COVID-19 pandemic in Scarborough, Ont., on Sept. 14, 2020. THE CANADIAN PRESS/Nathan Denette
Hindsight 2020: How do you preserve a year many Canadians would rather forget?

Figuring out how to preserve the story of the pandemic poses a series of challenges

Haley Callison. (Facebook photo)
Former B.C. pro hockey player frustrated with COVID-deniers after horrific bout with virus

Haleigh Callison hopes people will follow precautions and tone down the rhetoric

An air ambulance leaves West Coast General Hospital for a trauma centre at 9:50 p.m. on Wednesday, June 12 after a Port Alberni youth was injured in an accident on the Somass River. SUSAN QUINN PHOTO
COVID-19 outbreaks at pair of Vancouver Island Hospitals

Saanich Peninsula Hospital in Saanichton and West Coast General Hospital in Port Alberni affected

A man stands in the window of an upper floor condo in Vancouver on March 24, 2020. THE CANADIAN PRESS/Darryl Dyck
Change made to insurance for B.C. condo owners amid rising premiums

Council CEO Janet Sinclair says the change will mean less price volatility

The Walking Curriculum gets students outside and connecting with nature. (Amanda Peterson/Special to S.F. Examiner)
‘Walking Curriculum’ crafted by SFU professor surges in popularity

The outdoor curriculum encourages students to connect with the natural world

Most Read